1873

Publication of Lombard Street: a description of the money market by Walter Bagehot

Seminal work on crisis management and the role of a central bank, in which Walter Bagehot argues in favour of increasing the Bank of England’s gold reserves to enable it to manage a liquidity crisis and act as lender of last resort. He believed that the Bank of England should lend to banks that were short of liquidity but not to those unable to repay their debts - i.e. insolvent ones.